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12th | Retirement Of A Partner | Question No. 41 To 45 | Ts Grewal Solution 2023-2024

Question 41:


Rakesh retired from the firm. The amount due to him was determined at  ` 90,000. It was decided to pay the due amount as follows:
On the date of retirement − 
` 30,000
Balance in three yearly instalments − First two instalments being of 
` 26,000, including interest; and Balance amount as last instalment.
Interest was payable @ 10% p.a. Prepare retiring Partners' Loan Account.

 

Answer:


Dr.

Rakesh’s Loan A/c

Cr.

Date

Particulars

 (`)

Date

Particulars

 (`)

Year I

To Bank A/c (20,000 + 6,000)

26,000

Year I

By Y’s Capital A/c                          

60,000

 

To balance c/d

40,000

 

 

 

 

 

 

 

By Interest on Loan A/c                

6,000

 

 

 

 

(60,000 × 10/100)

 

 

 

66,000

 

 

66,000

 

 

 

 

 

 

Year II

To Bank A/c (22,000 + 4,000)

26,000

Year II  

By balance b/d

40,000

 

To balance c/d

18,000

 

 

 

 

 

 

 

By Interest on Loan A/c

4,000

 

 

 

 

(40,000 × 10/100)

 

 

 

44,000

 

 

44,000

 

 

 

 

 

 

Year III

To Bank A/c (18,000 + 1,800)

19,800

Year III

By balance b/d

18,000

 

 

 

 

 

 

 

 

 

 

By Interest on Loan A/c

1,800

 

 

 

 

(18,000 × 10/100)

 

 

 

19,800

 

 

19,800

 

 

 

 

 

 

 

Question 42: Ram, Manohar and Joshi were partners in a firm. Manohar retired and his claim including his capital and share of goodwill was `1,80,000. There was an unrecorded furniture estimated at ` 9,000, half of which was given for an unrecorded liability of `18,000 in settlement of claim of `9,000 and remaining half was taken by Manohar at a discount of 10% in part satisfaction of his claim. Balance of Manohar's claim was discharged by bank draft. Pass necessary Journal entries to record the above transactions.


 

Answer:


Date

Particulars

 

L.F.

Dr. `

Cr. `

 

B’s capital a/c

Dr.

 

4,050

 

  To Revaluation a/c

 

 

 

4,050

(Being unrecorded furniture taken over by partner B)

 

 

 

 

Revaluation a/c

Dr.

 

9,000

 

  To unrecorded liabilities a/c

 

 

 

9,000

(Being remaining unrecorded Liabilities  paid by partner)

 

 

 

 

B’s capital a/c

Dr.

 

1,650

 

  To Revaluation a/c

 

 

 

1,650

(Being loss on revaluation debited to B’s capital)

 

 

 

 

B’s capital a/c

Dr.

 

1,74,300

 

  To Bank a/c

 

 

 

1,74,300

(Being final amount paid to B’s capital on his retirement by bank draft)

 

 

 

 

Total

 

 

1,89,000

1,89,000

 

 

 

 

 

 

Question 43:


Harish, Paresh and Mahesh were three partners sharing profits and losses in the ratio of 5 :4: 1. Paresh retired on 31st March, 2022. His capital as on 1st April, 2021, was 80,000. During the year 2021-22, he withdrew 5,000. He was to be charged interest of 100 on drawings.

The Partnership Deed provides that on the retirement of a partner, he will be entitled to:

(i) His share of capital.

(ii) Interest on capital @10% per annum.

(iii) His share of profit in the year of retirement.

(iv) His share of goodwill of the firm.

(v) His share in the profit/loss on revaluation of assets and liabilities.

Additional Information:

(a) Paresh's share in the profit of the firm for the year 2021-22 was 20,000.

(b) Goodwill of the firm was valued at 24,000.

(c) The firm incurred loss of 12,000 on the revaluation of assets and liabilities.

(d) Paresh was to be paid?7,700 in cash and the balance was to be transferred to his Loan Account bearing interest@ 6% per annum. Loan was to be repaid in two equal annual instalments, the first instalment to be paid on 31st March, 2023.

You are required to prepare:

(i) Paresh's Capital Account.

(ii) Paresh's Loan Account till it is finally closed.

 

Answer:


Paresh’s Capital A/c

Particulars

`

Particulars

`

Revaluation A/c

4,800

Balance b/d

80,000

Drawings

5,000

Interest on Capital

8,000

Interest on Drawing

100

P&L Appropriation A/c

20,000

Paresh’s Loan A/c

1,00,000

Harish’s Capital A/c

8,000

 

 

Mahesh’s Capital A/c

1,600

 

1,17,600

 

1,17,600

 

Paresh’s Loan A/c

Date

Particulars

`

Date

Particulars

`

31-3-22

Balance C/d

1,00,000

31-3-22

Paresh’s Capital A/c

1,00,000

31-3-23

Bank A/c

56,000

1-4-22

Balance b/d

1,00,000

31-3-23

Balance C/d

50,000

31-3-23

Interest on Loan A/c

6,000

 

 

1,06,000

 

 

1,06,000

31-3-24

Bank A/c

53,000

1-4-23

Balance b/d

50,000

 

 

 

31-3-24

Interest on Loan A/c

3,000

 

 

53,000

 

 

53,000

 

Question 44:


X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 1st April, 2009, Y retires from the firm. X and Z agree that the capital of the new firm shall be fixed at  ` 2,10,000 in the profit-sharing ratio. The Capital Accounts of X and Z after all adjustments on the date of retirement showed balance of  ` 1,45,000 and  ` 63,000 respectively. State the amount of actual cash to be brought in or to be paid to the partners. (AI 2020)

 

Answer:


Old Ratio (X, Y, and Z) = 3 : 2 : 1

Y retires from the firm. 

New Ratio (X and Z) = 3 :

Total capital of the New Firm = ` 2,10,000

X‘s new capital = 2,10,000×3/4=1,57,500

Z‘s new capital = 2,10,000×1/4=52,500

 

Ascertainment of Actual Cash to be brought in or to be paid to the partners

 

Particulars

X

Z

New Capital

1,57,500

52,500

Existing Capital

1,45,000

63,000

Cash Paid/Brought in

(12,500)

(Brought in)

10,500

(Paid)


 


 


 


 

Question 45: Lisa, Monika and Nisha were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. On 31st March, 2019, their Balance Sheet was as follows:


BALANCE SHEET OF LISA, MONIKA and NISHA as at 31st March, 2019

Liabilities

 

`

Assets

`

Trade Creditors

 

1,60,000

Land and Building

10,00,000

Bills Payable

 

2,44,000

Machinery

12,00,000

Employees' Provident Fund

 

76,000

Stock

10,00,000

Capitals:

 

 

Sundry Debtors

4,00,000

Lisa 14,00,000

14,00,000

 

Bank

40,000

Monika

3,60,000

31,60,000

 

 

Nisha

 

 

 

 

 

 

36,40,000

 

36,40,000

On 31st March, 2019, Monika retired from the firm and the remaining partners decided to carry on the business. It was agreed that:

(I) Land and building be appreciated by `2,40,000 and machinery be depreciated by 10%

(ii) 50% of the stock was taken over by the retiring partner at book value.

(iii) Provision for doubtful debts was to be made at 5% on debtors

(iv) Goodwill of the firm be valued at `3,00,000 and Monika's share of goodwill be adjusted in the accounts of Lisa and Nisha.

(v) The total capital of the new firm be fixed at `27,00,000 which will be in the proportion of the new profit Sharing ratio of Lisa and Nisha. For this purpose, Current Accounts of the partners were to be opened.

Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm on Monika's retirement. (CBSE 2019)

 

Answer:


Revaluation Account

Dr.

 

Cr.

Particulars

 (`)

Particulars

 (`)

To provision for doubtful debts

20,000

By land and building

2,40,000

To Machinery a/c

1,20,000

To capital a/c

Lisa’s =1,00,000×2/5=40,000

Monika’s =1,00,000×2/5=40,000

Nisha’s =1,00,000×1/5=20,000

(In old ratio)

 

 

 

1,00,000

 

 

 

 

 

2,40,000

2,40,000

 

 

 

 

 

 

 

 

 

 

 

Partners’ Capital Accounts

 

Dr.

 

Cr.

 

Particulars

Lisa

Monika

Nisha

Particulars

Lisa

Monika

Nisha

To Monika’s capital a/c

To stock

To Monika’s loan a/c

To balance c/d

80,000

 

 

13,60,000

 

5,00,000

10,60,000

40,000

 

 

3,40,000

By Balance b/d

By Lisa’s capital a/c

By Nisha’s capital a/c

By revaluation a/c

14,00,000

 

 

40,000

14,00,000

80,000

40,000

40,000

3,60,000

 

 

20,000

14,40,000

15,60,000

3,80,000

14,40,000

15,60,000

3,80,000

 To balance c/d

18,00,000

9,00,000

By Balance b/d

By current a/c

13,60,000

4,40,000 

 

3,40,000 

5,60,000

18,00,000

9,00,000

18,00,000

9,00,000

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet

as on April 01, 2019 after Monika’s retirement

Liabilities

 (`)

Assets

 (`)

Trade creditors

Bills payables

Employees provident fund

Capital a/c

Lisa= 18,00,000

Nisha= 9,00,000

1,60,000

2,44,000

76,000

 

 

27,00,000

Land and building

Machinery

Stock

Sundry debtors     4,00,000

Less; Provision           20,000

for Doubtful debts

Bank

Lisa’s current a/c

Nisha’s current a/c

12,40,000

10,80,000

5,00,000

 

3,80,000

 

40,000

4,40,000

5,60,000

Monika’s loan

10.,60,000

42,40,000

42,40,000

 

 

Working notes;

WN -1

Calculation of gaining and sacrificing ratio

 

Lisa

 

Monika

 

Nisha

Old ratio =

2

:

2

:

1

New ratio =

2

 

:

 

1

Gaining ratio = New ratio – Old ratio

Lisa’s gain = 2/3-2/5=10-6/15=4/15

Nisha’s gain = 1/3-1/5=5-3/15=2/15

Gaining ratio of Lisa and Nisha = 4:2=2:1

 

WN-2 Treatment of goodwill;

Firm’s goodwill =3,00,000

Monika will be compensated = 1,20,000×2/5=1,20,000

Lisa will compensate =1,20,000×2/3 = 80,000

Nisha will compensate =1,20,000×1/3 = 40,000

Condition for goodwill remaining partner to retiring partner

 

WN -3

Lisa’s capital = 27,00,000×2/3=18,00,000

Nisha’s capital = 27,00,000×1/3=9,00,000

 

 

Ts Grewal Solution 2023-2024

Click below for more Questions

Class 12 / Volume – I

Chapter 5 – Retirement of a Partner

 

Question No. 1 To 5
Question No. 6 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55

Question No. 56 To 60